Neglected bill could raise price of milk to $8

MYRTLE BEACH, SC (WMBF) - As lawmakers struggle toward a compromise on the fiscal cliff, a very important farm bill is waiting in the wings.

If and when Congress reaches a deal concerning tax increases, it may be too late.

"I have to start thinking about it because dairy products are such a need for my family and me," worries Steven Kruly, a father of three.

It's been dubbed as the "dairy cliff," and if lawmakers don't give this bill some attention soon, farmers will continue operation under a 1940s law since the farm bill expired three months ago.

"It's almost going to be impossible to feed your family on a normal basis," exclaims Brian Cunningham, a concerned consumer.

Federal funding assured through March 2013 has kept prices at the average for now, but if the first of the year comes and goes without any action on the farm bill, prices could skyrocket. Experts expect the price of milk to reach $8.

"It'd be ridiculous if it went up to $7 a gallon, that's double what gas is," says Kruly.

"That would take your cost of living and drive it through the roof," says Robbie Kruly, another grocery shopper surprised by the news.

It works like this: the government agrees to buy milk and other products from farmers in order to keep them in business. Right now that formula has the government step in when the price drops to less than half the current national price.

"That would affect everybody, especially here in Myrtle Beach, the lowest paying place in South Carolina, and will devastate a lot of people," worries Kruly.

However, that subsidy will expire January 1st, 2013 and a law from the 1940's will kick in, having the government paying off inflated prices which would be double the current price.

And it won't just affect your groceries.

"From $4 to $7 you're going to notice the price difference and it's going to hurt. But, you're probably only buying a gallon a week so it won't affect you like if you were buying 30 gallons a week," explains Brad Daniels with Croissants Bistro & Bakery.

Restaurants, bakeries, and even Day Cares purchase large amounts of dairy every week.

"That could lead to a significant cost of the product which is passed off to the customer or absorbed in our profit," says Daniels.

The cost would be based on the cost of production, set over 64 years ago, which would pass along more cost to the consumers.

In 1964, the year the Beatles came to the United States and Martin Luther King, Jr. won his Nobel Peace Prize, the price of a gallon of milk averaged 95 cents.

In 1980, when Ronald Reagan was elected president and the Mount St. Helens eruption killed 57 people, milk cost $1.60.

In 2011, the average cost of a gallon of milk was $3.39. So what can we expect if the farm bill is swept under the rug? Well, your gallon of milk could cost around $8.

Here's a look at the increase in prices in the United States over the past 50 years:

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